Is It Acceptable to Promote a Socially Irresponsible but Legal Product to Stakeholders?
When you think of cheating, you may think of irresponsible behavior in the classroom. But Noel Biderman created a company called Avid Life Media (based in Toronto) that is dedicated to another form of cheating.
Avid Life Media is owner of several different love-connection brands, including Cougar Life and its most controversial brand, Ashley Madison. With the motto “Life Is Short. Have an Affair,” the website has had more than 31 million users over its lifetime. The company encourages married men and women to spend less than a minute to register on the largest website to openly promote infidelity. The company employs hundreds of programmers, designers, and marketers and has conducted a private placement for investors. While many stakeholders would say the purpose of the website is wrong, there is nothing illegal about this business. But the fact that the website helps people engage in cheating on their spouses—including providing an email address to which one’s spouse would never have access—is an ethical issue. The company’s website was hacked and a threat was made to reveal member’s names if the site was not shut down. The hacking led to extremely sensitive personal information being leaked and resulted in at least one suicide. The company settled for $1.7 million with 13 states and the Federal Trade Commission. The company has agreed to not engage in some of the controversial behaviors that it has been involved with in the past, including no fake profiles and tighter data security.
1. There is nothing wrong in providing a legal service many people desire, and those that hack the site to close it down should be punished.
2. From a stakeholder perspective, it is wrong to provide socially irresponsible services, and those who hacked the site to have it shut down were providing a public service.
3. Is it wrong for hackers to release the names of people who register on the Ashley Madison website?
Evidence suggests caring about the well-being of stakeholders leads to increased profits. One study found when firms were placed on a socially responsible index, stakeholders reacted positively. Other studies also associate a stakeholder orientation with increased profits. Therefore, although the purpose of a stakeholder orientation is to maximize positive outcomes that meet stakeholder needs, the support stakeholders have for companies they perceive to be socially responsible also serve to enhance the firms’ profitability. Table 2-3 lists CR Magazine’s best companies in terms of corporate citizenship and social responsibility. Many of these firms are highly profitable, succeeding both ethically and financially.
Table 2-3
CR’s Best Corporate Citizens
1.
Microsoft Corporation
2.
Intel Corp.
3.
Hasbro, Inc.
4.
Johnson & Johnson
5.
Ecolab, Inc.
6.
Bristol-Myers Squibb Co.
7.
Xerox Corp.
8.
Lockheed Martin Corp.
9.
Lexmark International, Inc.
10.
Campbell Soup Co.
Source: CR’s 100 Best Corporate Citizens 2016, http://www.thecro.com/wp-content/uploads/2016/04/100best_1.pdf (accessed April 6, 2017).
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